JUDGMENT Dharmadhikari S.C., J.
1. This chamber summons has been taken out by the original defendant for the following reliefs:
(a) This Hon'ble Court be pleased to declare that the award/judgment dated 6th August, 2004, passed by the Labour Tribunal, Hong Kong, is not conclusive as to any matter therein and that the same has been passed in violation of the provisions of Section 13 of the Code of Civil Procedure, 1908;
(b) This Hon'ble Court be pleased to pass an appropriate order of permanent injunction, or such similar order/s or direction/s as this Hon'ble Court may deem fit, to restrain the plaintiff from acting upon, or taking any steps in pursuance or furtherance of the award/ judgment dated 6th August, 2004, passed by the Labour Tribunal, Hong Kong;
(c) This Hon'ble Court be pleased to withdraw the warrants of attachment:
(i) On the ownership premises of the defendant situate at Cecil Court, 4th Floor, 26, Mahakavi Bhushan Marg, Mumbai 400 039;
(ii) On moveable property of the defendant lying and situated in the defendant's premises at Engineering Centre, 5th floor, 9, Mathew Road, Opera House, Mumbai 400 004 and at Cecil Court, 4th floor, 26, Mahakavi Bhushan Marg, Mumbai 400 039; and
(iii) Issued to the extent of Rs. 19,26,008.16 ps. on the Bank account No. 01000006447 standing in the name of the defendant with the State Bank of India, Opera House, Branch Mumbai 400 004 and Bank Account No. 5728 and Account No. 16716 standing in the name of the defendant with the Bank of Baroda, Opera House, Branch Mumbai.
2. The contention of the Assistant Director of the defendant on affidavit is that the award/judgment dated 6th August, 2004 is not a decree of a superior Court in a reciprocating territory. Further, it is not conclusive as to any matter and it is, therefore, not executable and enforceable.
3. The above pleas have been elaborated in the affidavit in support and during oral submissions. Apart from the fact that certain sub-clauses of Section 13 of the C.P.C. are also invoked, the nature of the challenge remains the same.
4. The facts leading to the filing of this chamber summons and about which there is no dispute between parties can be set out now.
The plaintiff was appointed as Joint Director on 12th June, 1989. On 10th February, 1990 plaintiff was confirmed in service. On 22nd July, 1994 plaintiff was deputed to set up and open defendant's representative office in HongKong. Terms of exchange were fixed at INR 1 = HK $ 0.76. On 26th August, 1994 plaintiff requested defendant to send an "appointment letter" bearing the same date as his deputation letter dated 22nd July, 1994 specifying his designation and emoluments in HongKong dollars, to enable him to obtain a work visa. Defendant on 27th August, 1994 sent an appointment letter dated 22nd July, 1994 to plaintiff to enable him to obtain work visa. On 29th August, 1994 plaintiff requested to send another appointment letter as per the draft suggested by the Solicitors in HongKong. Plaintiff further requested that the date of appointment letter should be as recent as possible and not as mentioned in his earlier fax. On 2nd September, 1994 defendant sent appointment letter as requested by plaintiff dated 31st August, 1994. On 22nd May, 2002 plaintiff requested for 60 days encashment of earned leave. On 24th May, 2002 defendant permitted plaintiff to encash 60 days earned leave. On 28th June, 2002 defendant informed plaintiff that Rs. 59.807/- be credited to his savings bank account in State Bank of India, Opera House branch towards encashment of 60 days earned leave. On 10th July, 2002 plaintiff tenders his resignation to defendant in Mumbai w.e.f. 1st November, 2002. On 16th July, 2002, plaintiffs resignation was accepted w.e.f. 15th August, 2002. On 31st July, 2002 defendant closes its office in HongKong w.e.f. 31st July, 2002 and informs Registrar of Companies, HongKong. On 15th August, 2002 plaintiffs resignation came into effect. On 16th August, 2002 plaintiff addressed a letter to the defendant mentioning that the letter dated 22nd July, 1994 (Exh. 4 to the chamber summons) determined the terms of his posting to HongKong. On 20th August, 2002 plaintiff in another letter mentioned that the terms of his appointment to the defendant were by letters dated 12th June, 1989 and 10th February, 1990 (letter of confirmation) and the terms and conditions of his posting to HongKong was vide defendant's letter dated 22nd July, 1994. On 21st/22nd August, 2002 plaintiff asked defendant for packing allowance to transfer his belongings from HongKong to Mumbai.
5. It is contended that after about one year of his resignation, plaintiff addressed a communication and claimed diverse sums from the defendant. In substance, the claim is that the plaintiff was appointed in HongKong office. This is a continuous contract until termination and, therefore, plaintiff is entitled to terminal dues in terms of monetary currency prevailing in HongKong. This claim is denied by the defendant and the communication to that effect is dated 17th October, 2003.
6. It is alleged that one William Lam and Company addressed a communication purporting to serve the claim filed by the plaintiff against defendant in HongKong Labour Tribunal. However, it is contended that entire set of proceedings before the said Tribunal and annexed or forming part of the record of the HongKong Tribunal has not been at any time served on William Lam and company. There is a reference made to an interview of the defendant's representative by the HongKong Labour Tribunal. At the same time, Mr. Ravindranathan, a representative of defendant, had visited HongKong Labour Tribunal and informed Ms. Lung at the Tribunal's office that the case of defendant is that the Tribunal has no jurisdiction. During this visit Mr. Ravindranathan was informed by the Tribunal office that proceedings are informal in nature. In other words, they are conciliation proceedings and parties are not permitted to be represented by lawyers.
7. On 2nd August, 2004, the defendant wrote to the HongKong Labour Tribunal that they have received only a claim form and no other proceedings or annexures have been served upon the defendant. Once again defendant informed HongKong Tribunal that it has no jurisdiction to entertain the alleged claims of plaintiff.
8. A serious dispute is raised about the authenticity of the record of the Tribunal inasmuch as the plea of defendant is that its representative was not in HongKong on 5th August, 2004 when he is alleged to have been interviewed by the HongKong Tribunal. On 6th August, 2004 the subject award/ judgment's passed and it is recorded that plaintiff was present but the defendant was absent. Thereafter, the warrant of attachment of the moveable and immovable properties of the defendant was received on 9th December, 2004 and the present chamber summons has been taken out some time on 21st December, 2005.
9. Mr. Zaiwalla learned Senior Counsel appearing for the defendant in support of this chamber summons has invited my attention to Section 44-A of the C.P.C. He submits that the requirement of the said provisions is that what is executable and enforceable is a decree of a superior Court of any of the reciprocating territory. In his submission, the mandatory pre-requisites of Section 44-A are not satisfied in this case.
10. Firstly, the decree is not of any reciprocating territory. He submits that the Court is situate in HongKong. In his submission, HongKong was part and parcel of United Kingdom but after the understanding and treaties with the Republic of China, since July, 1997, HongKong has become part and parcel of Republic of China and ceased to be so of the U.K. In his submission, this fact is very vital inasmuch as the Government of India has recognised HongKong as a reciprocating territory when it was part of U.K. Admittedly, no notification has been issued after Hongkong has become part and parcel of Republic of China. In his submission, the entire scenario undergoes a drastic change. Now, Hongkong will be governed by laws and rules prevailing in Republic of China and any status conferred before it became part of Republic of China, is of no consequence. It being designated as a special Administrative Region also cannot carry the matter any further. The word "territory" has to be understood in the context of a country where it is situate or located and cannot be seen divorced from that context. Thus, HongKong being not an independent country but a territory, which is part of a country or nation, a understanding or treaty with that nation by Central Government is alone of relevance. It is decisive. Therefore, an argument that HongKong continues to enjoy same position and status and its becoming part of China does not in any manner alter earlier position must be rejected. Mr. Zaiwalla was at pains to point out that any notification issued by Government of India earlier would cease to have legal effect or efficacy after 1997. A fresh notification would be necessary and that having not been issued, the order/award/of the HongKong Tribunal is not executable or enforceable and on this short ground alone the chamber summons deserves to succeed.
11. Assuming without admitting that HongKong continues to be reciprocating territory, yet, in the instant case, the order/ award/judgment is of Labour Tribunal in HongKong. It is sent for execution to the District Court at HongKong. Therefore, the Labour Court not being a Superior Court in a reciprocating territory, its award/cannot be executed or enforced by resorting to Section 44-A of the C.P.C. Hence, this chamber summons should be allowed on this short ground alone.
12. In alternative and without prejudice to the above submissions, it is contended by Mr. Zaiwalla that once a decree of a superior Court in the reciprocating territory is sought to be enforced and executed by filing a certified copy thereof in the District Court, then, Section 13 of the C.P.C. becomes applicable. In the present case, the said award/judgment can never be said to be binding and conclusive because firstly, it is not rendered on merits of the case. Secondly, it is opposed to the principles of natural justice. Thirdly and lastly, it is obtained by fraud. In these circumstances, the award/judgment dated 6th August, 2004 passed by the HongKong Labour Tribunal is not enforceable and executable as it is not binding and conclusive on the defendant herein. It being vitiated in the manner set out above, the chamber summons deserves to succeed.
13. In support of his submissions, Mr. Zaiwalla invited my attention to the affidavit in support and the annexures thereto. He has invited my attention to the notification dated 18th November, 1968 issued by the Ministry of Law, Government of India. He submits that there are only four courts mentioned therein and it is pertinent to note, according to him, that the name of a District Court is specifically mentioned along with Supreme Court in this notification. He submits that the District Court which is referred to by the plaintiff is not mentioned in this notification. Inviting my attention to Explanation I to Section 44-A of C.P.C., Mr. Zaiwalla submits that Labour Tribunal which has passed the subject award is not a District Court and in any event, it is not mentioned in this notification.
14. In his submission, there is no notification issued after 1968. According to him, this notification cannot be of any assistance, once the regime has changed. In other words, the notification would not survive after HongKong has become part of China. It is not an independent country in law. Its designation as a special division/area and reliance placed upon the Rules in that behalf is totally misplaced because that cannot meet the mandatory requirement of Section 44-A of C.P.C. In other words, the plain and unambiguous wording of the Statute viz,, that a notification is necessary for designating a reciprocating territory cannot be dispensed with. More so, by placing reliance upon some rules of Governance framed for HongKong. They cannot be of any use. There is no notification stating that HongKong, even after it ceasing to be governed by laws of U.K. and becoming part of China after 1997, is a reciprocating territory within the meaning of Section 44-A of C.P.C. In his submission, there is nothing to indicate that a notification issued by the Central Government in 1968 continues to hold the field after 1997. Mr. Zaiwalla has invited my attention to a letter dated 13th February, 2006. In his submission, this letter cannot substitute the requirements of issuance of notification, notifying HongKong as reciprocating territory, after it became part of sovereign of China.
15. The clarification purportedly issued in this letter cannot be of any assistance. That apart, he submits that a notification of 1968 is clearly superseded inasmuch as, the penultimate para of this letter mentions only one District Court located at Wan Chai. Therefore, notification of 1968 does not survive. HongKong is not reciprocating territory after 1997. He has invited my attention to several Articles and the preamble to the Rules.
16. Apart from the above, according to Mr. Zaiwalla, the matter must be understood in the proper perspective. He submits that the plaintiff is India based official. He submits that he was sent on deputation by an Indian company to HongKong. All letters issued to him were for Visa purpose only. He submits that plaintiff receives remuneration from India. He submits that the appointment letter and the terms and conditions of the employment must be understood in this context. Inviting my attention to the letter dated 22nd July, 1994 and placing emphasis on Clause 8 thereof, the submits that posting is for the purpose of setting up representative office in HongKong, the appointment is on deputation. The terms and conditions of such service rendered on deputation in HongKong are settled in India. It is only for the purpose of enabling the defendant to receive monies in HongKong that the conversion rate is mentioned. The nexus and connection of the contract of service is with India and Indian law would govern the same. He submits that all documents and letters should be read in this backdrop and so read, it is clear that the claim made by plaintiff in HongKong is ex facie without jurisdiction and not maintainable.
17. Elaborating his submissions with regard to the award being ex parte and opposed to principles of natural justice, reliance is placed by Mr. Zaiwalla on notice and summons at pages 126 and 127 and a letter at page 128. He submits that no legal representation is permitted. In his submission, the claim is such that if it is to be contested, legal assistance should have been made available. He relies upon a letter dated 2nd August, 2004 addressed by the defendant to the HongKong Labour Tribunal. He submits that the defendants were handicapped. All documents were not served on them. It is pertinent to note that the office of defendant in HongKong was closed in August, 2002. Therefore, the ex parte award is not binding and conclusive.
18. He has also contended that the award is not on merits and in that behalf, he relies upon the affidavit of Ravindranathan. In his submission, gratuity in this case is claimed for service rendered in India before a Labour Court in HongKong. Assuming without admitting that the gratuity can be paid in HongKong, it cannot be at the same rate. All payments having been made in Indian Rupees, such claim could not have been made in HongKong. Even the period required for being eligible and qualified to receive gratuity is to be computed in the context of requirements in that behalf in Indian law. He has invited my attention to the appointment letter and submits that claim for 13 years service rendered by the plaintiff cannot be made in HongKong as the service is not rendered in HongKong through out. This demonstrates that a fraud has been perpetrated on the Labour Tribunal in HongKong. Therefore, the award/ judgment is not binding and conclusive.
19. In support of his above contentions, Mr. Zaiwalla places reliance upon following decisions:
(i) British Indian Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries and Ors. ;
(ii) Sankaran Govindan v. Laxmibharati .
(iii) Algemene Bank Nederland N.V. v. Satish Dayal Choksi .
(iv) International Woollen Mills v. Standard Wool (U.K.) Ltd. .
20. On the other hand Mr. Hidayutallah, learned Senior Counsel appearing for plaintiff submits that the controversy raised by the defendant must be seen in the context and backdrop of a very vital and fundamental fact, viz., that this is an executing Court and not an Appellate Court. He submits that the entire attempt on the part of defendant is to convert these proceedings into appellate proceedings. He submits that this Court cannot go behind the award. He submits that full reply to the claim of plaintiff was filed by defendant in the Court/Tribunal at HongKong. The submissions in the affidavit in support of the present chamber summons and this reply are identical. Even the documents, on the contents of which, reliance has been placed by the defendant are identical. The averments with regard to fraud are also same.
21. Mr. Hidayatullah invites my attention to the Act and Rules prevailing in HongKong with regard to Constitution of Labour Court and its powers so also the procedure adopted by it. He submits that the said enactment is a complete code. It contemplates not only a fullfledged opportunity to defend the claim before Labour Tribunal but elaborate provisions have been made to approach it in case it decides a matter ex parte. The ordinance/ rules provide for an appeal as well. Neither is any application made by the defendant to set aside the ex parte award nor is any appeal filed to challenge the same. Once the award is passed under this ordinance and by looking at the reply as also documents, then, it cannot be said that the award is an ex parte award or that it has not been rendered on merits of the claim. He submits that the plea of fraud is hopelessly vague and devoid of material fact and particulars. In this behalf, he contends that the burden is squarely on one who asserts that a foreign judgment is not binding and conclusive and it is vitiated on any of the grounds mentioned in Section 13 of C.P.C. That burden is to be discharged completely by him. In the present case, in a serious issue like this, the averments in the affidavit in support of the chamber summons are vague and totally unsubstantiated. Therefore, the case does not fall within any of the exceptions much less the exceptions pressed into service. The award is binding and conclusive and should be enforced and executed by this Court.
22. Referring to the main aspect of the matter, he submits that HongKong is a reciprocating territory. It was recognised as a reciprocating territory in 1968 and it continues to be such. That it has become part of China does not alter the position. Atleast, nothing is shown from the record. He has invited my attention to the clarification issued by Ministry of Justice , HongKong. He submits that despite HongKong becoming part of China, the basic law contemplates that its status has not undergone a change. In this behalf he has placed strong reliance upon the decision of the Supreme Court in the case of Transocean Shipping Agency (P) Ltd. v. Black Sea Shipping and Ors. reported in A.I.R. 1998 S.C. 707.
23. Mr. Hidayatullah has also invited my attention to the basic law of HongKong and more particularly Articles 2, 5, 8, 12, 18, 80 and 81. He has also invited my attention to the ordinance which provides for establishment of Labour Tribunal, procedure to be followed by it, nature of the orders that can be passed and Remedies of aggrieved parties etc. He submits that all safeguards and checks are provided in this ordinance. The ordinance continues to hold the field. He submits that the ordinance clearly states that the Labour Court is on par with District Court and it is, therefore, a superior Court. The award is of the Superior Court of HongKong and HongKong is reciprocating territory. That being the position, plaintiff can invoke Section 44-A of C.P.C. and in absence of the case falling within the exceptions carved out by Section 13 thereof, this Court cannot refuse to enforce and execute foreign award.
24. Mr. Hidayatullah has submitted that it is fallacious to contend that the award/ judgment is not on merits. In this behalf, his submission is that an ex parte award or judgment can also be considered to be a judgment on merits. Absence of defendant in this case is not a decisive factor. More so, when full reply/written statement was filed. It is not a reply which states that defendant reserves any right to make submissions in case it is held that foreign Court has no competence to decide the issue. There is clear submission to the jurisdiction of foreign Court as it is invited to decide the matter or claim on merits. He submits that the issue of jurisdiction was raised in the reply/ written statement. However, it is not the case of defendant that the said reply was filed without prejudice to the rights and contentions on jurisdiction or that the Court was invited to decide the said issue as a preliminary issue. Merely because the issue of jurisdiction is raised in the written statement, it cannot be said that the defendant has not submitted to the jurisdiction and authority of the foreign Court.
25. In this case documents were annexed to the reply of the defendant. The plaintiff filed his claim and substantiated it by producing several documents. Once, such is the position and the defendant has taken a chance before foreign Court, then it is not open for it to make any grievance.
26. According to Mr. Hidayatullah all such pleas are not open once remedy of moving the HongKong Tribunal for setting aside ex parte order, review and appeal has not been availed of by the defendant. This being the position, when self-same pleas are repeated, this Court should not entertain any of the objections and proceed to enforce and execute the decree in accordance with law.
27. In answer to the submissions of Mr. Hidayatullah, Mr. Zaiwalla invited my attention to the decision of the Supreme Court in the case reported in 1990(3) S.C.C. 481 (supra). He submits that from the materials produced before me, it is apparent that there is no voluntary submission to the jurisdiction as alleged. On the other hand, the issue of jurisdiction being raised and all contentions were raised to support that plea, it cannot be urged that the defendant has not objected to the adjudication en merits. That apart, it is apparent that neither is there any notice nor any opportunity to meet the claim of plaintiff. This is a clear case where in the absence of a reciprocation and even otherwise, the Labour Tribunal in Hongkong assumed jurisdiction to itself and entertained the claim of an Indian employee against an Indian employer. There is no indication at all from the award that any documents were in fact tendered leave alone considered. There is nothing to indicate that judgment is on merits. There are no reasons assigned by the Labour Court/Tribunal. For all these reasons and considering the law laid down by the Supreme Court, this is not an award which can be executed.
28. With the assistance of Mr. Zaiwalla and Mr. Hidayatullah, I have perused the chamber summons, affidavit in support, reply and rejoinder thereto. So also, additional affidavits and the documents annexed thereto.
29. For properly appreciating the rival contentions, it is necessary to refer to Section 44-A of C.P.C. which reads thus:
44-A. Execution of decree passed by courts in reciprocating territory. - (1) Where a certified copy of a decree of any of the superior courts of any reciprocating territory has been filed in a District Court, the decree may be executed in (India) as if it had been passed by the District Court.
(2) Together with the certified copy of the decree shall be filed a certificate from such superior Court stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of proceedings under this section, be conclusive proof of the extent of such satisfaction or adjustment.
(3) The provisions of Section 47 shall as from the filing of the certified copy of the decree apply to the proceedings of a District Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the satisfaction of the Court that the decree falls within any of the exceptions specified in Clauses (a) to (f) of Section 13.
Explanation I: "Reciprocating territory" means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and "superior courts", with reference to any such territory, means such courts as may be specified in the said notification.
Explanation II: "Decree" with reference to a superior Court means any decree or judgment of such Court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment.
30. Similarly, Section 13 also will be relevant and it reads thus:
13. When foreign judgment not conclusive - A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except -
(a) Where it has not been pronounced by a Court of competent jurisdiction;
(b) Where it has not been given on the merits of the case;
(c) Where it appears on the fact of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of (India) in cases in which such law is applicable;
(d) Where the proceedings in which the judgment was obtained are opposed to natural justice;
(e) Where it has been obtained by fraud;
(f) Where it sustains a claim founded on a breach of any law in force in (India).
31. From a bare perusal of these provisions, it is clear that the term "foreign Court" has been defined to mean a Court situate outside India and not established or continued by the authority of the Central Government and "foreign judgment" means the judgment of such Court. It is conclusive as to any matter thereby directly adjudicated upon between same parties or between parties under whom they or any of them claim litigating under the same title except, if the same falls within sub-clauses (a) to (f) of Section 13. Section 14 sets out a presumption as to foreign judgment but if contrary appears on record or it is proved that foreign Court was not competent or lacked jurisdiction to adjudicate into any matter, then its judgment shall not be conclusive. A provision for execution of the foreign judgment is made in Section 44-A and the conditions prescribed thereunder are that a certified copy of the decree of any of the superior Court of any reciprocating territory has been filed in a District Court, then, the decree may be executed in India as if it has been passed by the District Court.
32. The law is well settled that it is not that every foreign judgment, which is conclusive and about which a presumption can be raised under Section 14, that is capable of being executed in India. Such judgment furnishes an independent cause of action based upon which parties can be sued in India. However, if decrees pursuant to such judgments are to be executed through medium of Indian courts, then, conditions prescribed under Section 44-A(1) have to be complied with. This is clear from Sub-section (3) of Section 44-A. Similarly, if such a decree is incapable of being executed because the District Court is satisfied that it falls within any of the exception specified in Clauses (a) to (f) of Section 13, then even if it is of a superior Court in reciprocating territory, same cannot be executed in India.
33. Explanation - I, which has been pressed into service before me defines a "Reciprocating Territory". It means any country or territory outside India which the Central Government may by notification in the official gazette, declare to be a reciprocating territory for the purpose of this section. Similarly, the term "superior Court" with reference to any such territory would mean only such courts as are specified in the notification issued by the Central Government.
34. The argument of Mr. Zaiwalla is that the Central Government has issued a notification in exercise of powers conferred by Explanation I to Section 44-A of C.P.C. dated 18th November, 1968 which is published in the Government of India gazette on 23rd November, 1968. Before proceeding further, it is necessary to reproduce this notification:
G.S.R. 2096: In exercise of the powers conferred by Explanation 1 to Section 44-A of the Code of Civil Procedure, 1908 (5 of 1908), the Central Government hereby declares, with effect on and from the 1st December 1968, HongKong to be a reciprocating territory for the purposes of the said section and the following courts in HongKong to be superior courts of that territory, namely:
i) Supreme Court:
ii) Victoria District Court;
iii) Kowloon District Court;
iv) Fanling District Court;
35. Admittedly, when this notification was issued, HongKong was not subject to the authority of Peoples Republic of China. The historical position is that it was occupied by Britan after Opium war in 1840. On 19th December, 1984 Chinese and British Government signed joint declaration on the question of HongKong, affirming that the Government of China will resume exercise of sovereignty over HongKong with effect from 1st July, 1997. Noticing this fact means that as on the date of issuance of the above mentioned notification by the Central Government neither joint declaration was in force nor the Government of China exercised any authority or sovereignty over HongKong. HongKong, therefore, was under the British Rule on the date of issuance of notification.
36. The question posed before me is that when the plaintiff lodged the claim before HongKong Court (HongKong Labour Claims Tribunal), HongKong was subjected to the sovereignty of China. The case proceeded when HongKong was not under British Rule but part of Republic of China and/or under its sovereignty. On the date of the subject award/judgment, this position continued and thus Government notification ceases to have legal effect. HongKong, after it became part of China, is not a reciprocating territory within the meaning of Explanation I to Section 44-A. No fresh notification has been issued by the Central Government. Therefore, the award/judgment is not of reciprocating territory and incapable of being executed and enforced. The larger question is whether because of such contingencies, a notification issued by Central Government notifying a territory as reciprocating territory for the purpose of Section 44-A along with courts mentioned therein, losses its legal sanction and authority if that territory ceases to be a part of a country and becomes subject to the Authority of other State or Country. In such an eventuality, whether a fresh notification is necessary is the other question posed before me.
37. A bare perusal of explanation would demonstrate that the Legislature was aware of all such contingencies. Parliament while amending the C.P.C. has taken note of the fact that a territory outside India may be part of a country or may cease to be so and come under authority of another State or country and whenever such a contingency occurs, care is taken to see that holder of a foreign decree does not suffer. It took care, therefore, to exhaustively define the term "reciprocating territory" to mean any country or territory outside India. If reciprocating territory is defined to mean any country or territory outside India and as in the present case HongKong is admittedly a territory outside India, then as to which country exercises sovereign power over HongKong is wholly immaterial and irrelevant for our purpose. When the Parliament has enacted the provision in plain and unambiguous language, then, such word and language has to be construed and interpreted literally. There is no scope for reading into, adding or subtracting anything when the words are plain, unambiguous and clear as in the instant case. Therefore, it is not possible to accept the contention of Mr. Zaiwalla that upon HongKong becoming part of Republic of China it ceases to be a reciprocating territory and the notification reproduced above, would have no legal effect or efficacy after 1st July, 1997. If Mr. Zaiwalla's contentions are accepted that would mean reading something in Sub-section (1) of Section 44-A which is impermissible in law. In this behalf, a reference can usefully be made to a Division Bench decision of the Allahabad High Court, reported in Jugul Kishore and Anr. v. Gobardhan Lal and Ors. , (R.S. Pathak, J., - as he then was). Speaking for the Bench in this decision, observed thus:
9. The first contention advanced on behalf of the appellants is that the execution of the Burma decree in India is void because the decree was a foreign decree not capable of execution in India. Stated so widely, the acceptance of the proposition would engative all that has been accomplished so for towards the recognition and enforcement of foreign judgment.
10. It is true that a judgment of a foreign Court, being the command of a foreign sovereign - it is after all the voice of sovereignty speaking through the judicial agency - cannot be enforced beyond the limits of his territorial sovereignty. A sovereign cannot command obedience outside his own realm. Ordinarily, therefore, there can be no direct execution of foreign judgments.
11. It cannot also be disputed that foreign courts have not been accepted as courts of record in the English sense, and therefore, the principle traced to the English Common Law, that upon a suit being decreed the original cause of action is merged into the decree, does not apply to foreign judgments. It is for this reason that a parry is entitled either to sue upon the foreign judgment or to bring a suit upon the original cause of action. Hall v. Odber 1809-11 East 118, and In Re: Henderson Nouvion v. Freeman 1887(37) Ch.1 244.
12. But over the years, legal writers and courts by covering various approaches to the problem, have attempted to provide a juristic basis for the recognition of foreign judgments. These attempt to reconcile the necessity of giving effect to foreign adjudication with the assertion of the sovereignty of national courts. The several doctrines enunciated in this regard have their faithful adherents, but a rational basis in each case is not always easily discernible.
13. Among the earliest doctrines propounded in England was that based on the comity of nations. This principle according to Cheshire, means that "in order to obtain reciprocal treatment from the courts of other countries, we are compelled to take foreign judgments as they stand and to give them full faith and credit" (A). It is not necessary to trace the reasons here, but this doctrine came to be recognised as inadequate and soon fell to the challenge of its critics.
14. According to Professor Gutteridge, the doctrine of an "acquired right" explains the reasons for the enforcement of a foreign judgment (B) and this is the doctrine to which Dean H.E. Read probably refers when he explains:
the true basis upon which the Anglo-Dominion authorities place the recognition of a foreign judgment is that it proves the fact that a vested right has been created through the judicial process by the law of a foreign law district.(C).
15. Several decisions by the courts in England have now accepted the view, pronounced in 1842, that the recognition of a foreign judgment is based on the assumption that it creates a new legal obligation. It proceeds from the concept that a foreign judgment creates by fiction a contract between the parties, see Schibsby v. Westenholz 1870(6) QB 155 at p. 159 per Blackburn, J.
16. Finally, the school led by Von Bar "attempts to harmonise the recognition of foreign judgments with the application of foreign laws, by calling attention to the relationship between law and judgment. A judgment, in his view is a lex specialist, a law regulating one single case. (D).
17. These are among the more prominent doctrine upon which the recognition and enforcement of foreign judgments have been sought to be justified.
18. Although legal jurisprudence appears to have abandoned the doctrine of comity based upon the rule of reciprocity the requirement of reciprocal treatment has been made by statute in several countries, a practical prerequisite to the enforcement of foreign judgments. From the judgments, Extensions Act, 1868 in England to the Administration of Justice Act, 1920, the principle of reciprocal treatment was consistently followed and later on attained full expression in the Foreign (Reciprocal Enforcement) Act, 1933 when the scheme was extended to the countries completely foreign to the political sense to the United Kingdom (E).
19. In 1937, in our own country, Section 44-A was inserted in the Code of Civil Procedure enabling decrees of any of the superior courts in the United Kingdom or of any reciprocating territory to be executed in British India by a District Court. The reciprocating territories were by definition confined to such Dominions of the British Empire as were notified by the Central Government.
20. Consequent to the change in the constitutional position in 1937, Burma separated from India and with effect from April 1, 1937 became a separate British possession. By a notification made on March 27, 1939, Burma was declared to be a reciprocating territory for the purpose of Section 44-A. This position continued until Burma declared her independence in 1948 and left the British Commonwealth. Consequently, it was no longer possible to treat her as reciprocating territory and by a notification of June 21, 1952, the Central Government cancelled the earlier notification declaring Burma to be a reciprocating territory, the cancellation having effect from January 4, 1948.
21. Meanwhile fundamental constitutional changes had taken place in India also, and upon the enactment of the Constitution of India she was proclaimed a sovereign democratic republic on and from January 26, 1950. It was, therefore, necessary to amend Section 44-A, and by the Code of Civil Procedure (Amendment) Act, 1952 the definition of "reciprocating territory" in Section 44-A was enlarged to cover any country or territory outside India which the Central Government, may be notification in the official gazette, declare to be a reciprocating country, so that now the Code puts all countries or territories outside India on an equal footing.
38. The above observations are reiterated in somewhat identical factual background by the Supreme Court in the judgment cited by Mr. Hidayatullah. As noted by the Division Bench of Allahabad High Court, a notification after a territory changes hands is necessary, which is not issued after HongKong ceased to be governed by United Kingdom. However, the other submission of Mr. Zaiwalla is that just as the term reciprocating territory is defined in Explanation I of Section 44-A, equally the term "superior court" is also defined therein. This term means the Court with reference to such territory which is specified as superior Court in the notification issued by Central Government. Its decree alone can be executed in India. In other words, his submission is that assuming without admitting that HongKong is a reciprocating territory and the notification of 1968 holds the field, still, if the decree is not of a superior Court, then, it cannot be enforced and executed in India.
39. For the purpose of considering this submission, reference to the said notification is necessary. Therein, the Central Government has notified that with effect on and from 1st December 1968 HongKong would be a reciprocating territory for the purpose of Section 44-A and the courts mentioned/ specified in the notification would be superior courts of that territory. There are only four courts mentioned in the said notification. Admittedly, there is no other notification but there is a letter clarifying the legal position issued on 13th February, 2006. It is not a letter issued by the Department of Law and Justice in India but Department of Justice, International Division in HongKong. In para 3 it is informed that there is only one District Court subject to administrative region, located at Wanchai. It further states that the notification issued by Government of India is based on outdated information. In other words, the notification dated 18th November, 1968 specifies four courts to be superior courts but the above letter says that there is only one District Court and that it should be treated as superior Court. However, the fact remains that Government of India has not issued any notification for the purpose of Explanation I to Section 44-A after 1968. Notification has to be issued by Central Government and it has issued only one notification in 1968 specifying four courts to be superior courts for the purpose of Section 44-A. Mr. Hidayatullah concedes that this is the only notification in the field. He relies upon it heavily. However, it is pertinent to note that Mr. Hidayatullah places reliance upon the ordinance which is issued for setting up of Labour Court/Tribunal in HongKong. He places reliance upon deeming provision therein, to urge that the Tribunal is treated as District Court and, therefore, it answers the requirements of Explanation I to Section 44-A of C.P.C.
40. I am unable to accept this contention. The decree in the present case is delivered on 6th August, 2004. Admittedly, it is delivered by Labour Tribunal of HongKong. It reads thus:
In the Labour Tribunal of Hong Kong
Claim No. LBTC 4475/2004
Vaz Kevin George ...Claimant.
Versus
The Cotton Textiles Export Promotion
Council ... Defendants.
AWARD/ORDER
1. Judgment be entered against the defendant for the claimant in the sum of $ 401,286.30 as follows:
Item Amount
A) Earned Leave $148,296.50
B) 60 days leave
encashment $ 36,342.80
C) Sick Leave $ 79,335.50
D) Gratuity $137,311.50
The defendant shall pay interest on (A), (B), (C) and (D) from 6/8/2004 until satisfaction as per Section 39(3) of the Labour Tribunal Ordinance Cap.25.
2. No order as to costs.
41. Even the plaintiff does not dispute the above fact because perusal of his claim Form II (Form of Claim) would show that it is filed before Labour Tribunal. Admittedly, the same is not mentioned as a superior Court in subject notification. The Doctrine of Reciprocity accepted and recognised by us is on the basis that Indian District Courts being Principal courts of Original Civil Jurisdiction and also enjoying appealable and revisional powers ought not be called upon to execute and enforce foreign decrees, if the same are not rendered by courts of Equivalent Status. They should atleast be equivalent. They can be superior. This is because of the position and status as also jurisdiction of District Courts in India. Therefore, unless and until they are superior courts in a Reciprocating Territory, there is no question of implementing and enforcing their decrees in India is the basis of the above principle. This Labour Tribunal is not a superior Court even if HongKong is a reciprocating territory. Mr. Hidayatullah invited my attention to paras 6 and 7 of the affidavit in reply filed on 20th January, 2006 and the additional affidavit in reply filed on 7th March, 2006. During the course of his oral arguments, he invited my attention to the ordinance and the basic law.
42. As observed above, it is immaterial as to whether the ordinance in HongKong grants status of a District Court or equates the award of Labour Tribunal with a decree of District Court in that territory. For the purpose of Section 44-A, at the cost of repetition, explanation I, defines both terms and when it comes to a superior Court, decree of which is sought to be enforced, even the superior Court must be specified in the notification. That is the mandate of Section 44-A along with explanation I and the same cannot be brushed aside and ignored by me. The Labour Tribunal has not been notified as superior Court. It is not specified in the notification. In the result, the award and judgment dated 6th August, 2004 is not capable of being enforced and executed.
43. Sub-section (1) of Section 44-A read together with other sub-section and explanation has been analysed by the Supreme Court in the case of M.V.Al Quamar v. Tsavliris Salvage (International) Ltd. . After re-production of this section in para 47, in paras 48 and 49 of this judgment, the Supreme Court has observed thus:
48. Incidentally, a plain reading of Section 44-A would depict the following components:
(i) The decree must be of a Superior Court in a reciprocating territory;
(ii) the decree is to be filed in a District Court;
(iii) The decree may be executed in India as if it had been passed by the District Court;
(iv) Provisions of Section 47 of the CPC shall apply, subject to the exceptions specified in Clauses (a) to (f) of Section 13;
(v) "Decree means any decree under which a sum of money is payable. (See Explanation II).
49. Section 44-A thus indicates an independent right, conferred on to a foreign decree holder for enforcement of its decree in India. It is a fresh cause of action and has no co-relation with jurisdictional issues. The factum of the passing of the decree and the assumption of jurisdiction pertaining thereto, do not really obstruct the full play of the provisions of Section 44-A. It gives a new cause of action irrespective of its original character and as such it cannot be termed to be emanating from the admiralty jurisdiction as such. The enforcement claimed is of an English decree and the question if whether it comes within the ambit of Section 44-A or not. The decree itself need not and does not say that the same pertains to an admiralty matter neither it is required under Section 44-A of the Code. Though, however, in the facts of the matter under consideration, the decree has been passed by the High Court of England (a Superior Court) in its admiralty jurisdiction. Registration in this Country, as a decree of a superior foreign Court having reciprocity with this Country would by itself be sufficient to bring it within the ambit of Section 44-A. The conferment of jurisdiction in terms of Section 44-A, cannot be attributed to any specific jurisdiction but an independent and an enabling provision being made available to a foreigner in the matter of enforcement of a foreign decree.
44. If these observations in the Supreme Court judgment, which is binding upon me, are taken into consideration, then, for fulfilment of the independent right granted to a foreign decree holder for enforcement of a decree in India, the conditions stipulated in the section have to be complied with. Mr. Hidayatullah has been unable to point out to me anything, other than 1968 notification, to show that the ingredients of Section 44-A(1) are satisfied. Therefore, I am unable to uphold his contentions, based as they are, on the laws prevailing in HongKong. The laws prevailing in HongKong may confer status on a Labour Tribunal functional therein equivalent to its District Court but that is of no assistance. The Indian law stipulates certain requirements for enforcing a foreign decree and as observed above, it is not possible to ignore its mandate.
45. Once the above conclusion is reached this chamber summons will have to be allowed on this short ground alone. However, exhaustive arguments have been advanced on other issues as well. Hence, assuming I am wrong in the above conclusion, I will deal with other submissions.
46. Mr. Zaiwalla's contention is that the foreign judgment is not binding and conclusive assuming that it is of a superior Court in a reciprocating territory, because it is not rendered by a Court of competent jurisdiction and further it is opposed to principles of natural justice. It is not rendered on merits as well. In his submission, the judgment is not on merits because it does not disclose that the Tribunal has applied its mind to the merits of the case that any oral and documentary evidence was led and considered by the HongKong Labour Tribunal. Further, there are no reasons assigned by it while allowing plaintiffs claim.
47. Mr. Hidayatullah supports this judgment by contending that a detailed reply/ written statement was filed by the defendant in which apart from issue of jurisdiction, issue on merits was also raised. Documents in support thereof were annexed and/or forwarded to the Tribunal. Representative of defendant attended Tribunal's office. It is upon consideration of the claim, annexures thereto and documents in support as well as written statement and the documents filed therewith that the Tribunal rendered its judgment. Therefore, it is not correct to state that it is ex parte and assuming it is so, it is rendered very much on the merits of the case.
48. In this behalf, reference will have to be made to the claim of plaintiff very briefly. The form of claim is part of the communication of William Lam and Co. (Exh.20 of chamber summons). It is stated that plaintiff claims the amount of monthly wages based upon defendant's calculations and particulars of which and grounds to support which are those mentioned in the Form of Claim. Diverse amounts under several items such as earned leave, 60 days leave encashment, sick leave, gratuity etc. are claimed vide this claim form submitted on 8th July, 2004.
49. The basis is that the plaintiff was employed by the defendant and posted at Hongkong at the relevant time. He tendered resignation from their service on 15th August, 2002. However, according to him, certain dues remained to be settled. Giving credit for the payment received by him, it is his case that the said payment was received by him on account and without prejudice to his rights and contentions. He contends that he did not receive any pension under a scheme applicable to all permanent officers of the defendant. It is his case that he resigned as an overseas officer of defendant. His case is that he was never recalled to India. He was posted in HongKong on the basis of a continuous contract. The said contract remains in force till the same is terminated. As per this contract, he is entitled to the sums which are to be paid to an overseas employee of the defendant. It should be settled in HongKong currency. No rules which are applicable to officers based in India can be applied to him. For all these reasons, the amounts claimed are due and payable.
50. By a further communication dated 17th November, 2003, which has also been relied upon, it is contended that allowances which are payable to persons who are placed on deputation outside India are also due and payable and reliance is placed upon certain terms and conditions as also rules and service rules. The defendant addressed a letter dated 2nd August, 2004 (Exh. 21 to the affidavit in support) to the Labour Tribunal and contended thus:
2. The Council is in receipt from this Hon'ble Tribunal a Form of claim in Form No. 2 wherein Mr. Vaz has claimed a total amount of HK$ 401,286.30 for the Council's alleged failure to pay Mr. Vaz earned leave, encashment, sick leave and gratuity. The council has not received from this Hon'ble Tribunal any other documents or statements that may have been filed by Mr. Vaz in support of his alleged claim.
3. At the outset the Council states that this Hon'ble Tribunal has no jurisdiction to entertain the claim filed by Mr. Kevin Vaz. Mr. Vaz was a permanent employee of the Council in India deputed to serve for a short period in HongKong. Mr. Vaz's salary even during his period of deputation was determined by the Council in Indian Rupees. Any alleged disputes raised by Mr. Vaz in relation to his employment are subject to the jurisdictions of the courts in India.
4. In support of the Council's stand that Mr. Vaz was a permanent employee of the Council in India, the Council wishes to place the following facts before this Hon'ble Tribunal:
(a) Mr. K.G. Vaz was appointed as a Joint Director of the Council by the Council's appointment letter, annexed and marked as Exhibit 1. By the appointment letter the basic pay and other allowances payable to Mr. Vaz was determined and he was also informed that his head quarters would be in Mumbai. However, the Council reserved its "right to transfer him to its regional offices in India as may be required. The appointment letter informed Mr. Vaz that his appointment would be subject to the service rules of the Council. The service Rules of the Council are annexed and marked Exh. 2.
(b) Mr. Vaz's service was confirmed by the Council's letter dated 10th February, 1990 and the confirmation letter also reiterated that Mr. Vaz would be governed by the service rules of the Council. The Council's letter dated 10th February, 1990 is annexed and marked as Exh. 3.
(c) By letter dated 22nd July, 1994 Mr. Vaz was deputed to set up and open the Council's representative office in HongKong. The initial period of the deputation was 6 months. The letter dated 22nd July, 1994 set out the terms and conditions of Mr. Vaz's deputation in HongKong. It inter alia stated that his pay would be Rs. 4,060/- in the grade of Rs. 3500-14-4480-160-5600-180-6500. It was further stated that the payments falling under basic pay and foreign allowance were based in Indian Rupees and would be converted to Rupees and would be converted to H.K. $ at a fixed conversion rate of Re. 1/- = .76 H.K.$. Thus even during the period of his deputation to Hong Kong, Mr. Vaz's salary was based in Indian rupees. The Council's letter dated 22nd July, 1994 is annexed and marked Exh. 4.
(d) By a fax message dated 26th August, 1994 for the purpose of immigration and visa formalities, Mr. Vaz requested the Council to send to him a letter bearing the same date i.e. 22nd July, 1994 (as the letter setting out the terms of his deputation to HongKong) mentioning the terms of his deputation in HongKong Dollars. This letter was sent by Council to Mr. Vaz for the purpose of immigration and visa formalities only. Thereafter, by another fax message dated 29th August, 1994, Mr. Vaz requested the Council to send him another letter again for visa purposes as the earlier letter did not mention his designation. Thus an "Appointment Letter" dated 31st August, 1994 in the format requested for was sent by the Council to Mr. Vaz. These letters viz., the letter dated 22nd July, 1994 mentioning Mr. Vaz's emoluments in HongKong Dollars and the "Appointment Letter" dated 31st August, 1994 were issued only for complying with immigration formalities. They were not his appointment letters as subsequently and dishonestly alleged by Mr. Vaz after his resignation, as more particularly stated hereafter. Mr. Vaz's letters dated 26th August, 1994 (with enclosure) and 29th August, 1994 are hereto annexed and marked Exh. 5 and Exh. 6 respectively. The Council's letters dated 22nd July, 1994 and 31st August, 1994 are annexed and marked Exh. 7 and Exh. 8 respectively.
(e) It is clear that even Mr. Vaz did not at any time consider the two letters dated 22nd July, 1994 and 31st August, 1994 as his appointment letters, as in his letter dated 16th August, 2002 he correctly mentions that"... I was issued a letter by the Council dated 22nd July, 1994 determining the terms and conditions of my posting to HongKong". Also in his letter of 20th August, 2002 he correctly mentions that the terms of his appointment to the Council were by letters dated 12th June, 1989 and 10th February, 1990 (Letter of Confirmation) and the terms and conditions of his posting to HongKong was vide the Council's letter dated 22nd July, 1994. The letters of Mr. Vaz dated 16th August, 2002 and 20th August, 2002 are annexed and marked Exh. 9 and Exh. 10 respectively.
(f) It was only subsequently, by letter dated 5th July, 2003 in order to dishonestly claim more money from the Council in foreign exchange that Mr. Vaz referred to the letter dated 31st August, 1994 to claim that his alleged appointment to the Hongkong office was a continuous contract until termination. The Council reiterates that the letter dated 31st August, 1994 was not the appointment letter of Mr. Vaz and was issued at the request of Mr. Vaz only in order to enable him to comply with visa and immigration formalities.
(g) That Mr. Vaz was a permanent employee of the Council in India and was only on deputation to HongKong is also clear from letter dated 6th November, 2000 issued by the Council to the Deputy Managing Director of the Provident Fund Claims Authority in HongKong which clearly mentions that Mr. Vas has been deputed to manage the office in HongKong and is always a permanent employee of the Council in India. Mr. Vas is aware of the said letter dated 6th November, 2000 issued by the Council to the Deputy Managing Director of the Provident Fund Claims Authority in HongKong. The letter dated 6th November, 2000 is annexed and marked as Exh. 11.
(h) It is pertinent that by fax dated 10th May 1995 Mr. Vaz informed the Council that as the Ministry of External Affairs had granted a 15% ad-hoc increase in foreign allowance to India based officials, in the Commission of India, HongKong his foreign allowance should also be increased. It is thus clear that Mr. Vaz acknowledged and was fully aware that he was an India based employee of the Council at all times. Hereto annexed and marked as Exh. 12 is a copy of the said fax dated 10th May, 1995.
51. The argument is that a person like plaintiff, if placed on deputation outside India, in case any dispute arises, cannot lodge a claim in HongKong Labour Tribunal. The HongKong Labour Tribunal does not have jurisdiction in so far as claims arising out of terms and conditions, in a contract entered into by an Indian company with its employee, based completely in India. Service rules are under Indian laws. Employee is an Indian employee. He has been sent on deputation to a foreign office established in a foreign country. However, any dispute regarding terms and conditions arrived at in India is governed and would stand completely governed by the laws prevalent and applicable in India. A permanent employee of a company in India cannot invoke jurisdiction of HongKong Labour Court and it has, therefore, no competency to entertain it.
52. It does not appear from the award/ judgment that these aspects have been considered. It is clear that the nature of the objections are that the employee is an Indian employee, the company is Indian company based in India and service conditions determined as per Indian law. Therefore, unless and until it is held that he has a right to claim the monies as claimed in HongKong Labour Tribunal, the matter could not proceed further. This is in addition to the denial that the claims cannot be granted considering the law prevailing in HongKong. In other words, the fundamental aspect, whether claims for earned leave etc. can be granted in HongKong by Labour Tribunal exercising jurisdiction there or not? Whether leave such as earned leave and compensation for the same are concepts which are prevailing in HongKong or not? needs to be considered. In my view, from a perusal of the award and the proceedings it does not appear that the HongKong Labour Tribunal has considered them. In this behalf, my attention is invited to the record of proceedings before HongKong Labour Tribunal. It reads thus:
The below table illustrates the record of proceedings:
Date of filing 8th July, 2004 Date of notice to the defendant & address 12th July, 2004 Date of interview & 19th July, 2004 name of the defendant 5th August, 2004 representative (DCR) Mr. Ravindranathan Date of hearing and Claimant present parties present defendant absent Date of the Award 6th August, 2004
53. The award/judgment has already been reproduced hereinabove. Therefore, it can safely be said that the judgment rendered in the absence of defendant can be held to be on merits provided the merits of the claim have been considered. Some materials and documents were produced and the contents thereof were gone into and considered by the Presiding Officer. In this behalf the judgment of the Supreme Court is eloquent enough. In the case of M.V.Al Quamar v. Tsavtiris Salvage (International) Ltd. . The Supreme Court in Head Notes B and D has observed thus:
(b) Civil P.C. (5 of 1908) Section 13(b) - Foreign Judgment- conclusiveness - judgment on merits - Ex parte decree - Cannot be presumed to be on merits by aid of Section 114 Illustration (e) of Evidence Act.
Sheikh Abdul Rahim alias S.A. Rahim v. Mohammed Din. , Overruled.
Evidence Act (1 of 1872), Section 114, Illustration (e).
"On the basis of presumption in Section 114 of the Evidence Act that judicial acts have been regularly performed a decree given ex parte cannot be presumed to be on merits. Section 114 merely raises the presumption, under Illustration (e) thereof, that judicial acts have been regularly performed. To say that a decree has been passed regularly is completely different from saying that the decree has been passed on merits. An ex parte decree passed without consideration of merits may be decree passed regularly if permitted by the Rules of that Court. Such a decree would be valid in that country in which it is passed unless set aside by a Court of Appeal. However, even though it may be a valid and enforceable decree in that country, it would not enforceable in India if it has not been passed on merits. Therefore, for a decision on the question whether a decree has been passed on merits or not, the presumption under Section 114 would be of no help at all."
(C) Civil P.C. (5 of 1908) Section 13(b), 44-A Foreign Judgment - Execution in India Objection that decree is not on merits Burden to prove nature of decree is on party alleging it - Burden how displaced.
Evidence Act (1 of 1872), Section 101.
"Undoubtedly the burden of proving that the decree is not on merits would be on the party alleging it. However, courts never expect impossible proofs. It would never be possible for a party to lead evidence about the state of mind of the Judge who passed the decree. On course, amongst other things, the party must show that the decree does not show that it is on merits, if necessary the rules of that Court, the existence or lack of existence of material before the Court when the decree was passed and the manner in which the decree is passed."
"D: Civil P.C. (5 of 1908), Ss. 13(b), 44-A - Foreign Judgment - Enforcement in India - judgment must be on merits - Ex parte judgment-When can be said to be on merits.
"Ram Chand v. John Barttett 1909(3) Ind., Cas. 523; Chintamoni Pandhan v. Paika Samal , overruled.
"It cannot be said that the expression "judgment on the merits" implies that it must have been passed after contest and after evidence had been let in by both sides. An ex parte judgment in favour of the plaintiff may be deemed to be a judgment given on merits if some evidence is adduced on behalf of the plaintiffs and the judgment, however, brief, is based on a consideration of that evidence. Where however no evidence is adduced on the plaintiffs side and his suit is decreed merely because of the absence of the defendant either by way of penalty or in a formal manner, the judgment may not be one based on the merits of the case.
"The broad proposition that any decree passed in absence of defendant, is a decree on merits as it would be the same as if defendant has appeared and conferred cannot be accepted. It cannot also be said that the decree was on merits as all documents as particulars had been endorsed with the statement of claim. At stage of issuance of summons the Court only forms a prima facie opinion. Thereafter Court has to consider the case on merits by covering into the evidence led and documents proved before it as per its rules. It is only if this is done that the decree can be said to be on merits.
54. Applying the aforesaid principles to the facts of the present case, in my view, without going into the aspect as to whether the award/judgmentis contrary to the principles of natural justice, it can be held that it is not a award or judgment rendered on the merits of the claim.
55. The strenuous attempt of Mr. Hidayatullah to demonstrate that all documents were filed along with claim and that the written statement also had annexures cannot be of any assistance because the record of proceedings reproduced above, is silent on this vital aspect. It is only when the Court is satisfied that documentary or oral evidence was led or that the Court applied its mind to the controversy, that it can be held that a judgment rendered, in the absence of a party, is on merits. If the above mentioned tests are not satisfied, it is not proper to hold that the judgment is on merits.
56. Although, I find no substance in the contention of Mr. Zaiwalla that fraud has been perpetrated in this case on HongKong Court, I find much substance in his contention that the HongKong Labour Tribunal did not deliver the judgment on merits of the claim for the reasons set out by me hereinabove. Additionally, the vital and fundamental aspect of the matter which goes to the root of the jurisdiction and Authority of the Labour Tribunal has also not been adverted to, leave alone considered. Such aspects are linked with the merits of the claim of the plaintiff. Once the written statement raising these issues was before the Court, then, in my view, the Labour Tribunal's observations and record should have indicated something with regard to the same. There are no reasons assigned and, therefore, it is not possible to assume as Mr. Hidayatullah would like me to, that the matter must proceed on the basis that rival contentions were considered, documents proved and their contents analysed before the conclusion in the Tribunal's award was arrived at. In that sense, it is not a speaking judgment. That does not satisfy the tests laid down by the Supreme Court. Once the above conclusion is reached, then, it is not possible to hold that the judgment of the Labour Tribunal is capable of being enforced and executed in India. Consequently, the chamber summons will have to be allowed.
57. The judgments relied upon by Mr. Hidayatullah were all considered by the Supreme Court in the judgment referred by me (supra). In addition, the Division Bench Judgment in the case of Algemene Bank Nederland N.V. v. Satish Dayalal Choksie , reversing a Single Judge's order has also been perused by me with the assistance of Mr. Hidayatullah. There an affidavit was filed by the witness of the appellant bank and the entire record was produced for perusal of the Division Bench. It is noted in the Division Bench judgment that the record indicates that the witness was examined, questions were posed and documents taken on record after the proof of its contents, tendered. It is in these circumstances, that the ex parte judgment of the Foreign Court has been held to be a judgment on merits. That is not the case here, as observed above. Therefore, the judgment of Orissa High Court as also other decisions relied upon by Mr. Hidayatullah are of no assistance to resolve the controversy.
58. The judgments relied upon by Mr. Zaiwalla include another decision of the Supreme Court in the case of British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries . Some of the observations therein are also relied upon by Mr. Hidayatullah. However, the Supreme Court has clearly held that submission to jurisdiction would mean, a distinction will have to be made when the question is of initial lack of jurisdiction. Therefore, a hyper-technical view as suggested by Mr. Hidayatullah cannot be taken. The observations in paras 20, 21, 24, 25 and 27 are eloquent enough.
20. The Privy Council in Sirdar Gurdyal Singh V. Rajah of Faridkote decided that no territorial legislation can give jurisdiction in a personal action which any foreign Court should recognise against absent foreigners owing no allegiance or obedience to the power which so legislates. Lord Selborne said:
In a personal action to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign Court, to the jurisdiction of which the defendant has not in any way submitted himself, is by international law an absolute nullity. He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the courts of every nation except (when authorised by special local Legislation) in the country of the forum by which it was pronounced.
There may however be submission to the jurisdiction of an Indian Court by litigating in India. The question then is what would amount to submission to jurisdiction.
21. Cheshire and North's Private International Law (11th Edn.) on submission to jurisdiction says:
Despite the fundamental principle that the Court cannot entertain an action against a defendant who is absent from England, it has long been recognised that an absent defendant may confer jurisdiction on the Court by submitting to it. This may be done in a variety of ways, such as by the defendant acknowledging service before actual service of the writ, or instructing a solicitor to accept service on his behalf. Commencing an action as a plaintiff will give the Court jurisdiction over a counter-claim. Although, a defendant who appears and contests the case on its merits will be held to have submitted to the jurisdiction, an appearance merely to protest that the Court does not have jurisdiction will not constitute submission, even if the defendant also seeks a stay of proceedings pending the outcome of proceedings abroad.
The authors go on to say that any person may contract, either expressly or impliedly, to submit to the jurisdiction of a Court to which he would not otherwise be subject. In case of an international contract it is common practice for the parties, to agree that any dispute arising between them shall be settled by the courts of another country even though both the parties are not resident of that country. In such a case having consented to the jurisdiction one cannot afterwards contest the binding effect of the judgment. The defendant out of the jurisdiction of the country may be deemed to have been served by service on his agent within the jurisdiction. However, parties cannot by submission confer jurisdiction on the Court to entertain proceedings beyond its authority.
24. In the instant case the appellant submits that as defendant, it appeared before the Indian Court to protest its jurisdiction and put forth its defences subject to that protest. The appellant, it has been stated in para 2 of the judgment under appeal, dated April 30, 1973, had not filed any objection to the findings as to damages. Did it then amount to submitting to the jurisdiction of the Indian Court in which the shipper or respondent 1 had no right to sue?
25. In Williams & Glyn's Bank PLC v. Astro Dinamico Cia Naviera S.A. the plaintiff bank sought to enforce its securities against the defendants by instituting proceedings in England in reliance of Clause 7 of the Guarantees, whereby each of the defendants were expressed to submit irrevocably to the jurisdiction of the English courts. The respondents (defendants) made an application disputing the jurisdiction of the English courts and had also simultaneously applied for stay of the action. It was contended on behalf of the appellants (plaintiffs) that the respondents (defendants) either had waived any objection to the jurisdiction because they had taken a step in the action by applying for a stay or mat they would waive any objection if they persisted with their application in priority to disputing the jurisdiction Lord Fraser observed that it would surely be quite unrealistic to say that the respondents had waived their objection to the jurisdiction by applying for a stay as an alternative in the very summons in which they applied for an order giving effect to their objection to the jurisdiction. That the summons made it is abundantly clear that they were objecting and the fact that they asked for a decision upon their objection to be postponed until the out-Come of the Greek proceedings was known, was not in any way inconsistent with maintaining their objection. There was no reason in principle or in common sense why the respondents should not be entitled to say: "We object to the jurisdiction of the English courts, but we ask for the proceedings necessary to decide that and the other issues to be stayed pending the decision of the proceedings in Greece". Reference was made to Rein v. Stein where it was said at page 471: "It seems to me that, in order to establish a waiver, you must show that the party alleged to have waived his objection has taken some step which is only necessary or only useful if the objection has been actually waived, or if the objection has never been entertained at all." In re Dulles' Settlement (No. 2) the question was whether a father, who was an American resident outside England, had submitted to the jurisdiction of the English Courts in a dispute about payment of maintenance to his child in England. He had been represented by Counsel in the English Court, who argued that he was not subject to their jurisdiction. Denning, L.J. (as he then was) said at page 850:
I cannot see how anyone can fairly say that a man has voluntarily submitted to the jurisdiction of a Court, when he has all the time been vigorously protesting that it has no jurisdiction. If he does nothing and lets judgment go against him in default of appearance, he clearly does not submit to the jurisdiction. What difference in principle does it made, if he does not merely do nothing, but actually goes to the Court and protests that it has no jurisdiction? I can see no distinction at all.
27. In the instant case the question is of initial jurisdiction on the basis of Clause 3 of the Bills of Lading. We have to ask the question whether the shipper could or could not have the right to sue at Cochin under the bills of lading. If he could not have done so, the appellant's appearance to protest about jurisdiction would not cure that defect of jurisdiction. However, we find that in the memo of appeal before the lower Appellate Court no specific ground as to jurisdiction was taken though there were grounds on non-maintainability of the suit. Even in the special leave petition before this Court, no ground of lack of jurisdiction of the courts below has been taken. We are, therefore, of the view that the appellant has to be held to have either waived the, objection as to jurisdiction or to have submitted to the jurisdiction in the facts and circumstances of the case. The defence that the suit was not maintainable in the absence of the owner of the ship could in a sense be said to have been on the merits of the case. The submission as to lack of jurisdiction is, therefore, rejected.
59. If the written reply filed before the Tribunal by the defendant is perused in the light of these principles, it is not possible to hold that the defendant has submitted to the jurisdiction of the HongKong Labour Tribunal. It is not necessary to decide whether the award is rendered by a Court of competent jurisdiction but, surely, the above pleas do not indicate that the defendant voluntarily submitted to its jurisdiction. The award being silent on these inter-linked aspects is not rendered on merits.
60. In the result, chamber summons is made absolute in the following terms:
(a) It is declared that the award/judgment dated 6th August, 2004 passed by the Labour Tribunal HongKong is not enforceable and executable in India because it is not rendered by a superior Court in HongKong as specified in the notification issued by Government of India dated 23rd November, 1968.
(b) It is also held that the same is not conclusive and binding because it is not rendered on the merits of the claim. In view of this conclusion, it is not necessary to decide whether it is vitiated for breach of principles of natural justice.
(c) As a result, all warrants of attachment issued in Execution are quashed and set aside. The properties and assets thereunder shall stand released. Ad interim order stands vacated.
(d) No order as to costs.